Campbell Soup is raising the prices it charges stores for its products in response to rising supply chain costs.
The maker of namesake soup brands and snacks like Goldfish crackers, Milano cookies and Snyder’s pretzels reported Wednesday that profit fell 5% to $160 million during the three months ending May 2, compared with the same stretch last year.
“Our results were impacted by a rising inflationary environment, short-term increases in supply chain costs, and some executional pressures,” CEO Mark Clouse said in a news release.
Campbell expects “more pronounced inflation” during its upcoming quarter and lowered its financial guidance for its fiscal year as a result.
Inflation is returning to the US economy, stoked by heightened consumer demand and businesses facing supply constraints. Prices for consumers increased 4.2% in April from a year ago, according to the Labor Department.
The Federal Reserve has said it expects inflation to be “transitory.”
Campbell is the latest consumer goods’ manufacturer to report higher costs. The producer price index, a measure of the prices businesses receive for their goods and services, was up 6.2% in April from the same time last year, according to the latest data from the Labor Department.
Many manufacturers are hiking prices as a result.
Procter & Gamble (PG) and Kimberly-Clark (KMB) are increasing the prices of household staples such as tampons, diapers and toilet paper, while Sherwin-Williams (SHW) said Wednesday that it’s raising paint prices.
Campbell plans to combat higher costs by increasing the prices it charges retailers and other customers it sells to by an average of mid-single percentage points later this year, Clouse said on a call with analysts.
Retailers can absorb those higher prices, pass them off to consumers, or respond with a combination of both tactics.
Shares of Campbell slipped 5% during Wednesday trading.